The lowest-income South Carolina residents would have to start paying state income tax while tax rates would drop for everyone else under a plan approved by a legislative panel.
Currently, South Carolinians with taxable income of $2,800 or less pay no state income tax. The state Board of Economic Advisers says these residents make up about 267,000 of the 2.1 million people who file state tax returns.
But under a Republican proposal approved Tuesday, those residents would have to begin paying 3 percent of their income in state taxes, or up to $84, The State newspaper said.
Residents who now pay 4 percent, 5 percent, or 6 percent of their taxable incomes in state tax would have their rates cut to 3 percent, a savings of up to $84 per person. That move would affect at least 185,000 people, according to the board.
Those residents with taxable incomes of $14,000 or more would continue to pay the same 7 percent rate.
Taxable income is a person’s annual income minus federal and state deducations.
“No matter how you go about tax reform, there are going to be winners and losers,” said state Rep. Garry R. Smith, a Republican from Greenville who serves on the subcommittee that approved the bill. “You try and mitigate the best that you possibly can. And I think we’ve done a pretty good job of doing that. We’re trying to make this as flat and as fair as possible.”
Democrats, however, said the plan would give tax breaks to well-off residents at the expense of the working poor.
“Republicans in this state have a way of taxing working-class citizens so that rich people get a break,” said House Minority Leader Harry Ott, according to The State
© 2013 Newsmax. All rights reserved.